“Defending Public Safety Employees’ Retirement Act.”
The act/law referenced in the subject line allows public safety workers to take a distribution from their gov’t DB or DC without incurring a 10% penalty as early as age 50
Question -Can, for example, a public safety worker roll his/her T-IRA into a gov’t DB or DC plan and subsequently take a pre 59.5 distribution to avoid the 10% penalty?
Thank you
Permalink Submitted by Alan - IRA critic on Wed, 2017-03-22 16:38
Yes, this is permissible just as rolling an IRA into an eligible plan will enable the employee to use the age 55 separation exception for the former IRA money. However, this provision cannot be used to avoid busting an active SEPP plan from an IRA account even though it will not bust a SEPP plan being taken from the qualified plan that distributes the penalty free distribution. https://www.congress.gov/114/bills/hr2146/BILLS-114hr2146enr.pdf